ACC has until today to reach settlement with customers
ACC bank has been given until this morning to reach agreement with four customers who are suing the lender for alleged losses suffered on bond investments sold by the bank and avoid a court case that could be very embarrassing for its Dutch parent Rabobank.
Lawyers for the claimants – who have alleged fraud and misselling – yesterday asked Judge John Cooke for time to see what might emerge from the discussions, without saying what the outcome might be.
Judge Cooke said he would delay the case, which was scheduled to start in the High Court in Dublin yesterday, until 10:30 today.
The case is expected to last up to six weeks and is regarded as a test case for hundreds of similar claims from investors who borrowed from the bank to buy an estimated €650 million of “Solid World” bonds.
Lavelle Coleman, a Dublin-based solicitors firm representing the four claimants, is also acting for hundreds of other potential claimants.
The vast majority of the investors in the various Solid World Bonds – 430 out of 432 – had taken out loans with ACC to buy the bonds and are claiming losses arising from interest repayments on the loans.
The schemes were hugely popular among Irish investors in 2003 and 2004.
An estimated €650 million worth of the geared tracker bonds were sold here to more than 1,000 investors who borrowed an average of €200,000 from ACC to invest in the bonds. The borrowing of the money over six years resulted in significant interest payments which far outstripped any return on the bonds, leaving investors facing losses.
Rabobank acquired ACC in 2001 and is one of the few global banks to retain a AAA credit rating.
Additional reporting by Bloomberg